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雷达卡
EM c5production and cost analysis in the short run
defining the production function
the relationship between a flow of inputs and the resulting flow of outputs in a production process during a given period of time
Q = f(L,K,M...) Q= quantity of output L= q of labor input. K= q of capital input. M = q of materials input
*K refers to physical capital, such as machines and buildings, not financial capital
fixed inputs
an input whose quantity a manager cannot change during a given period of time
variable input
*******can change******
short-run versus long-run production functions
short/ a production process that uses at least one fixed input
long/ a production process in which all inputs are variable
managerial rule of thumb
short-run production,and long-run planning
total product
the total quantity of output produced with given quantities of fixed and variable inputs
TP or Q =f(L,K)
Q : total product or total quantity of output produced
L : quantity of labor input (variable
K: with a cross a top the capital k represents quantity of capital input(fixed
average product and marginal product
A : the amount of output per unit of variable input
M: the addtional output produced with an addtional unit of variable input
AP = TP/L or Q/L
MP = dTP/dL = dQ/dL. on the book d= triangle / means changes on the variables
relationships among total, average, and marginal product
marginal product curve intersects the average product curve at the maximum point of the average product curve
economic explanation of the short-run production function
increasing marginal returns
the results in that region of the marginal product curve where the curve is positive and increasing, so that total product increases at an increasing rate
Law of diminishing marginal returns or law of the diminishing marginal product
the phenomenon illustrated by that region of the marginal product curve where the curve is positive, but decreasing, so that total product is increasing at a decreasing rate
negative marginal returns
the results in that region of the marginal product curve where the curve is negative and decreasing, so that total product is decreasing
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